04/25/2003 03:30 PM House L&C

HB  56-UNFAIR TRADE PRACTICES ATTY FEES/COSTS                                                                                 
                                                                                                                                
CHAIR ANDERSON  announced that the  next order of  business would                                                               
be HOUSE BILL  NO. 56, "An Act relating to  the attorney fees and                                                               
costs awarded in  certain court actions relating  to unfair trade                                                               
practices; and, if considered court  rule changes, amending Rules                                                               
54(d), 79, and 82, Alaska Rules of Civil Procedure."                                                                            
                                                                                                                                
Number 2243                                                                                                                     
                                                                                                                                
REPRESENTATIVE LES  GARA, Alaska State Legislature,  spoke as the                                                               
sponsor of HB  56 and noted that the Senate  has a companion bill                                                               
sponsored by  Senator Dyson.   He informed the committee  that as                                                               
of  a couple  of  years  ago, Alaska  has  the smallest  Consumer                                                               
Protection  Department  in  the  country, which  was  because  of                                                               
fiscal  constraints.   He estimated  that there  is probably  the                                                               
same  amount of  fraud in  this state  as there  is in  any other                                                               
state.   However,  the state  isn't able  to help  those who  are                                                               
victimized by this;  the cases tend to be small  and the attorney                                                               
general's office helps  those they can.  He explained  that HB 56                                                               
merely  says that  if the  attorney  general's office  represents                                                               
someone in a consumer fraud  case, the full enforcement costs and                                                               
full  attorney's  fees  should  be  rewarded  if  the  [consumer]                                                               
prevails.    Representative Gara  viewed  this  legislation as  a                                                               
smart way to  deal with consumer fraud while  dealing with budget                                                               
problems  at the  same  time.   The  full  enforcement costs  and                                                               
attorney's   fees  can   be  plowed   back  into   more  consumer                                                               
protection, and  hopefully the state  will move past  the current                                                               
situation in  which [only]  one-and-a-half attorneys  are working                                                               
on consumer  fraud cases.   He recalled  10 years ago  when there                                                               
were about  eight attorneys and  a host of  investigators working                                                               
on  consumer protection  cases.   This  legislation is  a way  in                                                               
which for there to be  a consumer enforcement presence without an                                                               
impact  on the  budget.   He  noted that  the Attorney  General's                                                               
Office supports  HB 56.   In fact, the administration  has stated                                                               
it would like to have a better consumer enforcement presences.                                                                  
                                                                                                                                
Number 2355                                                                                                                     
                                                                                                                                
REPRESENTATIVE  GUTTENBERG moved  to adopt  CSHB 56,  Version 23-                                                               
LS0300\H,  Bannister, 2/24/03,  as the  working document.   There                                                               
being no objection, Version H was before the committee.                                                                         
                                                                                                                                
TAPE 03-41, SIDE B                                                                                                            
Number 2367                                                                                                                     
                                                                                                                                
REPRESENTATIVE ROKEBERG  asked if  Rule 82  applies now  and this                                                               
legislation would abrogate Rule 82.                                                                                             
                                                                                                                                
REPRESENTATIVE  GARA   confirmed  that  this   legislation  would                                                               
abrogate  Rule 82.   He  explained  that currently  the state  is                                                               
entitled to  Rule 82 fees,  which are  roughly 20 percent  of its                                                               
fees.   Similar to  the federal government,  in certain  areas in                                                               
which prosecutions are important, laws  have been passed to allow                                                               
the  state  and federal  government  to  recover full  attorney's                                                               
fees.  In  federal and state antitrust law and  federal and state                                                               
hazardous  waste law,  the enforcement  authorities receive  full                                                               
attorneys fees;  this legislation would  be along the  same vein.                                                               
He highlighted that this legislation  would be a rule change, and                                                               
therefore would require a two-thirds vote.                                                                                      
                                                                                                                                
REPRESENTATIVE  ROKEBERG  recalled  that  he had  worked  on  the                                                               
legislation that  allowed private  causes of action  and recovery                                                               
for that.   He  asked if the  aforementioned wasn't  working, and                                                               
therefore the attorney general has to deal with these cases.                                                                    
                                                                                                                                
REPRESENTATIVE  GARA  explained  that  in  1997  the  legislature                                                               
passed  a law  specifying  that private  individuals  who push  a                                                               
consumer right's case on their  own can receive full compensation                                                               
for their  attorney's time.   Although the private bar  has taken                                                               
quite a  few of these  cases, the attorney general's  office says                                                               
that many  people come to them  and they can't help  them the way                                                               
they would  like.   Therefore, this  legislation would  allow the                                                               
attorney general's  office to increase  its staff a bit  in order                                                               
to take on these cases.   [The 1997 legislation] hasn't worked as                                                               
well as was hoped.                                                                                                              
                                                                                                                                
REPRESENTATIVE  GARA,   in  response  to   Representative  Gatto,                                                               
clarified that  Rule 82  allows the  prevailing party  to recover                                                               
roughly 10-20 percent of attorney's fees.                                                                                       
                                                                                                                                
Number 2285                                                                                                                     
                                                                                                                                
REPRESENTATIVE  LYNN   asked  if   this  legislation   will  help                                                               
consumers and the state's budget situation.                                                                                     
                                                                                                                                
REPRESENTATIVE GARA replied yes.                                                                                                
                                                                                                                                
Number 2270                                                                                                                     
                                                                                                                                
REPRESENTATIVE  LYNN  moved  to   report  CSHB  56,  Version  23-                                                               
LS0300\H, Bannister,  2/24/03, out  of committee  with individual                                                               
recommendations and  the accompanying fiscal notes.   There being                                                               
no objection, CSHB 56(L&C) was  reported from the House Labor and                                                               
Commerce Standing Committee.